Caesars Reveals Disappointing First-Quarter But Counts NC Online Sports Betting Launch A Success

While Caesars Entertainment successfully launched online sports betting in North Carolina last month, the company had a challenging first quarter in 2024.

During an earnings call with investors, the operator reported a 1% drop in consolidated net revenues to $2.7 billion and a 10% decrease in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

Nevertheless, executives lauded the entry into the North Carolina online sports betting market and pointed out other positives before voicing hopefulness about the company’s trajectory.

A hit to the bottom line but overall success in North Carolina

Caesars got a head start on other online sports betting operators by launching 10 days earlier due to the operator’s pre-existing partnership with the Eastern Band of Cherokee Indians. Caesars runs two Harrah’s-branded EBCI casinos.

The costs of launching in North Carolina led to a direct hit to the bottom line, along with low table hold in Las Vegas and bad weather in regional markets. CEO Anthony Carano wasted no time in attributing some of the company’s financial shortfall to North Carolina’s sports betting debut.

However, Eric Hession, the president of Caesars Sports and Online Gaming, followed up with some key details on why the launch was considered an overall success.

“During the quarter, we also successfully launched mobile sports wagering in North Carolina. We are encouraged by the early results and have signed up new customers at a faster pace than prior state launches, translating into a higher initial market share. We remain focused on several key priorities for the remainder of the year.”

CEO Tom Reeg underscored Hession’s points and added more details, revealing that the company has almost 9% of the market in North Carolina, “which is about [three times] what we’ve been doing in other new launch states.”

“North Carolina for us was a much more successful launch in terms of customer acquisition than we were anticipating,” Reeg continued. “And then what we have seen in recent states, we didn’t make any change to how we promoted into it. It’s really a comment on the strength of our database in North Carolina.”

The Caesars executives noted that March Madness and the Super Bowl “were not great” for the company. However, parlay betting was “up over 20% versus the same quarter last year.”

Improvements to sports betting options on the horizon

Hession indicated that the company is working on a shared wallet functionality “across state lines” and other sports betting enhancements.

“We expect to deliver this important functionality across all the jurisdictions in which we operate by the middle of 2025. We will also continue to improve our product on the sports betting side, enhancing our same-game parlay, live wagering, and internal pricing,” he said.

Overall, Hession reiterated that the company is pleased with its forays into sports betting. “We now offer sports betting in 31 North American jurisdictions, 26 of which offer mobile wagering. I’m very pleased with the progress we made this first quarter.”

Positive iGaming performance

While North Carolina online casinos will not be legal in the near future, some politicians have pushed to make them legal in the state. Caesars’ iGaming net revenue growth was the most positive in the quarter, “up by 54%.”

According to Hession, “iCasino remains a critical component of our digital growth strategy for 2024 and beyond.” He added that Caesars is on track to launch a new iCasino brand in the second half of 2024 and that the company continues to add “additional game content and functionality.”

A brighter future?

Despite the quarter’s mixed results, Caesars remains optimistic, even though Reeg said that in those three months, “everything that could go wrong did for us.”

Hession ended his comments on a positive note: “Excluding the effects from new state launches, our net revenue flow through to EBITDA was over 50%, consistent with our expectations and setting the stage for continued profitable growth in the years ahead.”

Overall, sports betting had a strong start in the state, according to the North Carolina Lottery Commission. Last month, residents placed bets totaling $659 million after most operators opened for business on March 11.

About the Author

Cheryl Coward

Cheryl Coward started her career as a news reporter in Washington, DC. She's a die-hard women's basketball fan and founded the website as a result of that passion. She loves writing about sports on all levels and has previous experience covering sports betting regulations, operator marketing campaigns and women's sports gambling topics.